About Kathleen Eads Expertise Having spent almost a decade with a Commercial Collection agency, Kathleen
can answer questions related to collections~calls, motivating debtors to pay,
skip-tracing. She now works for National Skip Trace Network (NSTN), providing
premier technological Directory Assistance to the collections (www.nstn.net)
industry via the internet.
Experience
Past/Present clients Travelers Insurance, Nationwide Insurance, CNA Insurance, USF & G, Liberty Mutual, ACS, Asst Acceptance, Pinnacle, Penncro, Superior Asset Mgmt, PRM, Collins Financial, CBE Group
Approx. 6 mos ago I went to the emergency room w/o any medical insurance. At the present time, I have 3 bills to pay - hospital, dr. and ambulance. Unfortnately I am a student living off of financial aid and I do not have the funds to pay off the high amounts. I have tried to get government assistance in paying the bills (medicare) but I was denied. I have contacted the creditors many times to try to work out some sort of reasonable payment plan but they will not accept what I can afford. (they want $50/mo., I can pay about 15-20). They do not care what my situation is and are unwilling to work with me. I am concerned about my credit. I am 27 yrs old and up to this point, my credit has been spotless. If these bills go to collections, what will the result be? Will it ruin my credit badly? What should I do? Please advise me.
Thank You, Linda
Answer Linda,
Part of collections is psychological, and most creditor/agencies want you to be in fear.
There are 2 sides to every coing, and without knowing how much you owe, it's hard for me to advise you on moving forward. For example, if you owe $20,000 & you are paying $20 a month, it will take 83 years to pay the debt off (and that doesn't even figure in any interest). If you owe $2000 and you are paying $20, it will still take you over 8 years to pay at this rate. I can understand you financial limitations, but with these examples, hopefully, you can respect the creditors position, as well.
Are you in a position to get a loan and pay the creditor off? This way, your smaller payments will be to your bank. The creditor will be taken care of and you get the payments you need. If you are denied the loan, your bank is required to send you written notification of denial. You can present this to the creditors, representing your good faith and showing them that your arrangements may be the better choice over a lawsuit (if they sue you, are they going to get any more than you are paying now?)
Depending on the balance, the matter could escalate to a judgment. This will be more damaging to your credit and stay on your credit report longer. It will also afford the creditors additional tools to collect, as a judgment, in some states, can provide wage garnishment, lien attachment etc. Without additional information on how much is owed, it's hard to say.
Bankruptcy is another option...of last resort, so to speak. If you simply cannot pay the bills, filing bankruptcy will relieve you of the obligation. Keep in mind, recent laws have made bankruptcy difficult to qualify for, and if you have any income at all, the most you might hope for is a chapter 13 reorganization, where you pay back a pro-rata share of what is owed. This will stay on your credit for 7 years, but give you protection of the courts and allow you to pay as you need.
I hope you get it all worked out,
Kathleen Crabtree
